Nikkei manages modest gain on weaker yen

Stocks closed slightly higher in quiet trading Tuesday, with the Nikkei 225 average ending above 14,700 for the first time in more than three weeks as the yen weakened.

The Nikkei closed up 19.68 points at 14,713.25, the highest closing level since Sept. 27. On Monday, the key gauge gained 132.03 points. The Topix gained 2.08 points to end at 1,214.44 after rising 6.84 points Monday.

Stocks moved lower in early trading as a wait-and-see mood dominated the market ahead of the release later Tuesday of closely watched U.S. employment data for September.

Market participants were keenly awaiting the jobs report as the first major economic indicator since the U.S. government shutdown, which lasted more than two weeks, brokers said.

But the Nikkei’s downside was limited by the yen’s drop against other major currencies as well as lingering expectations that stock prices will be given a boost by a slew of good corporate earnings reports for the fiscal first half that ended in September and upward revisions in full-year outlooks, brokers said.

With the dollar-yen rate hovering at levels well above the assumed levels of large Japanese manufacturers, there will be a good chance of upward revisions in their earnings estimates, an official at a bank-affiliated brokerage said.

Although the topside of stock prices has been capped by profit-taking triggered by signs of market overheating, the market has reason to test higher ground, the official added, pointing to expectations for steady corporate earnings and the support of the government’s economic policies.

Yoshihiko Tabei, chief analyst at Kazaka Securities Co., said the U.S. jobs report was drawing much interest from market players because it was expected to serve as a fresh clue on how the Federal Reserve will assess the health of the U.S. economy.

If the figures turn out to be weak and the Fed delays scaling down its asset purchases as far away as January or March, it could weigh on Tokyo stocks as the yen will likely stay relatively strong against the dollar, he said.

Japanese government bonds advanced Tuesday as investors took heart from a smooth auction of a new 20-year JGB issue.

The lead December futures contract on 10-year JGBs finished up 0.07 point from Monday at 144.79.